Volkswagen JV Chooses Poland for Latest Battery Cell Plant

Volkswagen has embarked on a joint venture to accelerate its automotive battery cell production capabilities to meet the expected surge in demand for battery-electric vehicles.

It will add to the existing partnership between its battery company PowerCo with Belgian cathode for lithium-ion specialist, Umicore, in a Brussels headquartered joint venture for large-scale industrial production of cathode active materials (CAM), and precursor cathode active materials (pCAM) in Europe will bear the name Ionway. Both parties aim to grow IONWAY’s annual production capacity to 160 GWh annually by the end of the decade, supplying up to 2.2M BEVs.

The $2.9Bn JV’s first production plant will be in Poland, PowerCo said over the weekend. The Polish government is providing €350 million ($371 million) in cash grants for the investment in the southwestern town of Nysa set to create around 900 jobs. Reuters reports that PowerCo decided on Poland because the location was strategically favorable, plus there was sufficient skilled labor and renewable energy sources for production. Construction work will begin as soon as the permitting process is completed.

Ionway is intended to supply PowerCo’s European battery cell factories with key battery materials and to cover a large portion of Volkswagen’s needs in the European Union. In return, Umicore receives secured access to an important part of Europe’s demand for cathode materials for electric vehicles.

Cathode active materials are the key to battery performance and are the single biggest contributor to overall battery cost and also its carbon footprint. Ionway hopes to combine the partners’ resources and know-how that propel BEV uptake.

PowerCo-CEO Frank Blome says: “Through Ionway, PowerCo reaches another milestone of our strategy to vertically integrate the battery supply chain. Together with our trusted partner Umicore, we source our own key cell production materials at reasonable prices. Secure access allows PowerCo to supply cost-competitive battery cells to Volkswagen Group for years to come ‒ enabling its brands to offer attractive, affordable EVs to its customers.”